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ISPs could have to pay more than £200,000 per year to comply with the government's plans to intercept Web traffic.

Medium to large ISPs will be expected to incur annual costs of between £23,200 and £236,000 to run the planned interception devices if suggestions in the report commissioned by the Home Office go ahead.

The conclusions by consultants The Smith Group are the first indications of how much the Regulation of Investigatory Powers (RIP) Bill will cost the industry.

The Smith Group also recommended that small ISPs pay £9,400 to £11,800 per year for the interception service, while the upfront costs of setting up the systems – estimated at £210,000 to £500,000 – should come out of government coffers.

"The burden on industry to meet the obligations of the RIP Bill is not onerous," the report states.

A Home Office representative stressed that the findings were "intended to inform thinking and stimulate debate", and did not at this stage represent Government policy. "Nothing in the report is definitive," he said.

He confirmed that the government still did not know when it would decide who would pay or how much, despite still wanting the Bill through Parliament by October.

"That part can be determined later – we would hope to get it resolved later this year," he said.

According to the Home Office, RIP planners are in talks with the main names in the Internet industry over the Smith Group's suggestions. "We want the costs as low as possible and proportionate," the representative said. "This is not something we want to impose on ISPs, we want discussion."

The RIP Bill is due to go to the report stage shortly after Parliament reconvenes following the Easter break.®